Tuesday, May 31, 2016

Other Downsides of Consolidation

Lorenzo Mendoza greets and kisses worker at his shuttered brewery in Caracas, Venezuela. He's trying to boost morale. Mendoza is the chief executive of Venezuelan food giant Empresas
Polar, which was founded in 1941 and is now the largest private company
in this socialist country. But Polar has come upon tough times.
Many of its processing plants are running at half-speed, and thousands
of employees have been furloughed since April, when all four of the
company's breweries were shut down by a barley shortage. The
government controls access to foreign currency, and Mendoza says it has
refused to provide the dollars Polar needs to import barley, which
doesn't grow in Venezuela's tropical climate.

The problem, of course, is this:

For Venezuelans who want to unplug from all these problems by popping
open a beer, that's no longer possible. Polar used to produce 80 percent
of Venezuela's beer, and now the supply is rapidly drying up.

4 comments:

You're going to have to explain how increasing the number of breweries would relax Venezuelan governmental controls on capital movements, freeing up dollars for breweries to purchase barley from overseas.

Further, "...says David Smilde, a sociologist at Tulane University who specializes in Latin America. He says private food companies like Polar have helped to prevent the total collapse of Venezuela."